Here are the member-only market studies for stocks, commodities, and currencies. We add new studies to this list once every few days.
Let’s analyze the stock market’s price action by objectively quantifying technical analysis. For the sake of reference, here’s the random probability of the U.S. stock market going up on any given day, week, or month.
*Probability ≠ certainty.
S&P : 10 year yield ratio (October 31, 2018)
The S&P : 10 year Treasury yield ratio has been falling recently. Its 14 weekly RSI is now almost at 30 (oversold).
Here’s what happens next to the S&P 500 when the S&P:10 year yield ratio’s 14 weekly RSI falls below 31 (first time in 1 month).
As you can see, the S&P tends to struggle in the short term. This suggests that the S&P’s road higher isn’t going to be an easy one.
Meanwhile, this is quite bearish for the 10 year yield.
Rising U.S. Dollar (October 24, 2018)
The U.S. Dollar has been rising recently while the U.S. stock market has been falling. As usual, this has some in financial media saying “U.S. stocks will fall because the dollar is rising”.
Is this true?
One way we can look at this is through the USD:S&P ratio. Recently the ratio has been rising rapidly because the U.S. Dollar Index is going up while the S&P is going down.
As a result, the U.S. Dollar:S&P ratio’s 21 day RSI exceeded 72 on October 24 (last Wednesday).
Here’s what the U.S. Dollar Index did next (historically) when the USD:S&P ratio’s 21 day RSI exceeded 72 (first time in 1 month).
As you can see, the USD Index has the tendency to go up 1 month later.
Here’s what the S&P did next
As you can see, this is neither consistently bullish nor bearish for the U.S. stock market on any time frame.